India is now one of the largest and most dynamic infrastructure and project finance markets in the world with the total number of project based SPVs at around 800, Fitch noted.

According to the Ministry of Finance public-private partnership (PPP) database, this includes roughly 500 concession based project SPVs (mostly in the transportation sectors). Besides, there are several privately-owned and financed independent power projects.

India's vast project pipeline (other than privately-owned and independent power projects) includes projects in various stages of expression of interest (EoI), bidding, construction and operation. It spans almost all sectors, including energy, ports, roads, rail, airports, education and hospitals, the rating agency said.

Fitch expects coal to remain the dominant source of power generation in India in the medium term. Projects that have secured coal supply assurances from the state-owned Coal India Ltd should benefit from relative insulation from price volatility, it said.